Gold prices remain stable as markets evaluate Powell's rate comments

22 Jun 2023 , 11:37 AM

Following comments from U.S. Federal Reserve Chair Jerome Powell that additional interest rate hikes were on the table, gold prices stabilized on Thursday after falling to a three-month low in the previous session.

Spot gold remained steady at $1,932.93 per ounce. To $1,943.30, U.S. gold futures saw a 0.1% decline.

Benchmark U.S. 10-year Treasury yields decreased to 3.723%, and the dollar index stayed very near to its lows from Wednesday.

Powell said in speeches to lawmakers on Capitol Hill on Wednesday that if the economy continues in its current course, further rate rises are ‘a pretty good guess’ of where the U.S. central bank is headed.

Chicago Federal Reserve Bank President Austan Goolsbee stated on Wednesday that before the central bank decides its next move, it needs more clarity on the trajectory of the labour market and inflation.

Raphael Bostic, president of the Atlanta Federal Reserve, became the first official to argue that the Fed would need to postpone future rate rises at least until after its meeting in July.

The potential cost of owning non-yielding bullion increases as interest rates rise. In other news, the Bank of England is expected to increase interest rates by a significant half-point on Thursday as a result of the failure of inflation to decline in May.

Due to increased shipments to India, Swiss customs data revealed that the country’s gold exports increased in May after dropping to their lowest level in ten months in April.

The largest gold-backed exchange-traded fund in the world, SPDR Gold Trust GLD, said that its holdings decreased 0.19% to 932.30 tonnes on Wednesday from 934.03 tonnes on Tuesday, a sign of sentiment.

Platinum increased by 0.4% to $945.11, palladium increased by 0.3% to $1,351.16, while spot silver increased by 0.1% to $22.671 per ounce.

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